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Facebook lookalike audiences have emerged as an extremely effective tool in the UA marketing toolbelt. Providing both scale and high ROAS when used correctly, Facebook lookalike audiences are a form of affinity-based marketing that can achieve game-changing results for your app marketing campaigns if you take the time to understand how it works and avoid the potential downside.

How lookalike modeling works

To understand how to optimize Facebook lookalike audiences for your app campaigns it helps to understand how lookalike modeling in general works. There are three major parts to lookalike modeling to consider:

Source data

Qualities analyzed for affinity

Ad delivery

Step 1: Generate a Seed Audience

For non-Facebook lookalike modeling, source data is generally limited to your existing user base. The first step is segmenting your base to find the ones that are most desirable (most engaged, biggest spenders etc.) and using that subset of users as a seed audience.

Step 2: Analyze for affinities

Using data about your ideal users, a DMP will analyze the specific qualities about users to determine what correlations in affinity for your app exist. That could include things like what other apps someone downloads, demographic information and so on.

Step 3: Map affinities and deliver ads

Once correlations in affinity are identified, a DMP can act on those insights to deliver your ads to a relevant audience.

Step 4: Measure and Optimize

Once your ads are in-market, it’s important to closely monitor ROAS and make adjustments to the affinities being used to determine a lookalike audience. For example, If your model was initially based on a specific set of demographics, but your ROAS is taking a hit, you might try targeting based on common apps installed.

Pros vs Cons to non-Facebook Lookalike Audiences

Pros

You are modeling based on your best customers, so in theory you should acquire more users with similar qualities

Better than a “pay and spray” approach where you take your best guess and make adjustments based on ROAS

Cons

If you are launching a new app or in a new market, this approach doesn’t work

Limited ability to scale

Depending on the technology you use, a lack of transparency might make it difficult to adjust and optimize your campaigns

How Facebook lookalike audiences are different

For the most part, Facebook uses the same formula to produce it’s own lookalike audience. However, the thing that makes Facebook’s Lookalike model so powerful is the universe of data and insight into user behavior that it incorporates. Variables like app usage, app page likes, allow Facebook to produce a more nuanced profile of your seed audience that is about as good as it gets at the 1% level, though that dilutes as you add scale to your campaign.

Pros & Cons of Facebook Lookalike Audiences

Pros

Can’t beat breadth and depth of behavioral data

More nuanced view of seed audience

Incredibly powerful at 1% level

Cons

Facebook doesn’t provide any insight into what affinity variables it is optimizing for making it impossible to leverage insights across platforms

Impossible to optimize exclusively for parameters that deliver ROAS

How to optimize your Facebook Lookalike Audience

Facebook Lookalike Audiences are essentially a black box, but you can still take steps to ensure your ad dollars are being allocated as efficiently as possible.

Focus on the 1%

The biggest risk involved with Facebook’s Lookalike model is that it becomes increasingly less effective as you scale beyond 1%. If you find yourself mid-campaign and realize you need more scale at the same ROAS, you are going to be out of luck. Do the math before you launch to make sure you can hit your goals before you exhaust the 1% audience and you will avoid a big headache.

Any lookalike model is only as good as it’s seed audience. Make sure you feel confident that the data you put into the model is representative of who your best users truly are. If you are launching a new app or in a new market and don’t have seed data you feel confident about, consider tools like Appnique that analyzes publicly available data so you can get a complete picture of your target audience without incurring the risks that come with using private user data.

Get started with a holistic affinity-based strategy

Facebook lookalike audiences are just one part of an affinity-based approach to user acquisition. If you are looking for ways to scale across Facebook, Apple Search Ads, and Google AdWords check out our on-demand webinar or contact us for a free consultation.